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Going metric

30 November 2016 / Shimon Shaw , Emma Bradley
Issue: 4578 / Categories: Comment & Analysis

Two recent cases that highlight the need for charities undertaking building projects to consider VAT carefully.


  • The extra 20% potential cost of VAT can be an unwelcome cost for charities relying on donations.
  • The zero rate can apply to a building used for a relevant charitable purpose.
  • The definition of ‘use for a relevant charitable purpose’.
  • The Longridge case held that since there was no profit and no intention to turn a profit was not relevant to a finding of economic activity.
  • For the village hall exemption to apply the building’s use must be under the direction or control of the local community.

For most charity trustees VAT is an unpleasant reality that needs to be negotiated carefully. Many charities are not registered for VAT and even those that do register are often in the position where they cannot recover all of it. Putting this...

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